Steep drop in unemployment rate spawns conspiracy

Conspiracy theorists came
out in force after the government reported a sudden drop in the U.S.
unemployment rate one month before Election Day. Their message: The Obama
administration would do anything to ensure a November victory, including
manipulating unemployment data.

The conspiracy was widely rejected.
Officials at the Labor Department said the jobs figures are calculated by
highly trained government employees without any political interference.
Democrats and even some Republicans said they also found the charges
implausible.

Yet that didn't stop the chatter. The
allegations were a measure of how politicized the monthly unemployment report
has become near the end of a campaign that has focused on the economy and jobs.

The conspiracy erupted after former
General Electric CEO Jack Welch, a Republican, tweeted his skepticism five
minutes after the Labor Department announced that the unemployment rate had
fallen to 7.8 percent in September from 8.1 percent the month before.

"Unbelievable jobs numbers..these
Chicago guys will do anything..can't debate so change numbers," Welch
tweeted, referring to the site of Obama campaign headquarters.

The drop in unemployment was announced
two days after Obama's lackluster performance in his first debate with
Republican challenger Mitt Romney.

Republican Rep. Allen West of Florida
soon announced via Facebook that he agreed with Welch.

"Somehow by manipulation of data we
are all of a sudden below 8 percent unemployment, a month from the presidential
election," West wrote. "This is Orwellian to say the least."

The Obama administration wasn't given
much time to gloat about the strong economic improvement. Instead, it had to
defend statisticians and economists against accusations made without any
supporting evidence.

"No serious person ... would make
claims like that," said Alan Krueger, chairman of the White House Council
of Economic Advisers.

The jobs report is prepared under tight
security each month by a relatively obscure government agency — the Bureau of
Labor Statistics — without any oversight or input from the White House. It is
based on data collected by an army of census workers, who interview Americans
in 60,000 households by telephone or door-to-door.

Eight days before the unemployment rate
is made public, the bureau's office suite goes into lockdown. Tom Nardone, a
36-year veteran at the agency who oversees preparation of the report, keeps
crucial papers in a safe in his office.

A big reason for the security has
nothing to do with politics. The data could move financial markets if it were
released early.

"These are our best-trained and
best-skilled individuals," Labor Secretary Hilda Solis said on CNBC. She
called the claims of manipulation "ludicrous."

The BLS, the statistical division of the
Labor Department, collected and analyzed data and calculated the unemployment
rate before Wednesday night's presidential debate.

Joel Naroff, president of Naroff
Economic Advisors, said that it's "not that unusual" for the rate to
move by three-tenths of a percent in one month. It's happened 12 times in the
past 10 years.

"In other words, at least once a
year, you should expect that large a move," he said in an email to
clients. It last happened 20 months ago, "so we were overdue. That is just
the reality of the data."

Romney didn't discredit the government
data. But plenty of conservatives did that work for him.

Conn Carroll, an editorial writer at the
Washington Examiner, tweeted: "I don't think BLS cooked numbers. I think a
bunch of Dems lied about getting jobs. That would have same effect."

Rick Manning, communications director of
Americans for Limited Government and the former public affairs chief of staff
at the Labor Department, said "anyone who takes this unemployment report
serious is either naive or a paid Obama campaign adviser."

Rep. Paul Broun, a Georgia Republican,
weighed in with a statement saying the report "raises questions for me,
and frankly it should be raising eyebrows for people across the country."

Economists offered more plausible
reasons for skepticism. A big chunk of the increase in employed Americans came
from those who had to settle for part-time work: 582,000 more people reported
that they were working part-time last month but wanted full-time jobs.

Conspiracy theories are nothing new for
Obama. He has been dogged by discredited claims that he wasn't born in this
country and that he is Muslim.

"Stop with the dumb conspiracy
theories. Good grief," Tony Fratto, who worked for President George W.
Bush, weighed in on Twitter.

It wasn't just the political elite commenting.
Angelia Levy, a researcher at the Federal Judicial Center, the research arm of
the federal judiciary, told her 588 Twitter followers that Welch's comments
were "unbelievable."

"All of the sudden they're
questioning this data that's been reported for decades," the Democrat said
in a phone interview. "It's so hypocritical and ridiculous."

Justin Wolfers, a professor of business and public policy at
the University of Pennsylvania's Wharton School and research associate at the
National Bureau of Economic Research, went on Twitter to say Welch "just
labeled himself an idiot."

In a follow-up phone call, Wolfers said
the economists who calculate the monthly jobs report "are nerds who spend
their lives crunching numbers for the public service. To impute their integrity
is outrageous."

The agency has been in the political
glare before.

In 1971, President Nixon took aim at it
after a top official, Howard Goldstein, publicly attributed a steep drop in
unemployment to largely technical factors. The administration reorganized the
agency and installed several officials in newly created positions. That led to
charges from Democrats that the Republican administration was politicizing the
bureau.

Welch said later in the day in a Fox
News interview: "I don't know what the right number is, but I'll tell you,
these numbers don't smell right when you think about where the economy is right
now."

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